GCC IPO in 2010 up 26%; Saudi dominates

30/12/2010 00:00 AST

The value of IPO market in the GCC climbed 26 per cent in 2010 to $2.7 billion compared to $2.1bn in 2009, ending the year with a positive note.

An Emirates 24/7 analysis of Capital IQ data shows that although the number of IPO deals this year went down to 10 from 12 last year, the total amount surged to $2.69bn from $2.13bn a year earlier, where most of the IPOs issues were greenfield statutory offerings, those that are ideally placed in secondary exchanges.

Similar to last year, most of the issuances in 2010 came from Saudi Arabia with eight deals worth $1.85bn or about 70 per cent of the total. In terms of value, the kingdom is followed by Oman ($475 million) and Bahrain ($372m).

However, three of the eight issuances from Saudi Arabia were insurance listings, which most analysts don’t actually count as a barometer of the health of the IPO market because they are statutory mandates.

In 2009, Saudi also lead the market with 11 IPOs worth $1bn, half of the issuances value-wise. Qatar made up the other half thanks to two deals worth $1bn (Vodafone’s $952m and Mazaya Qatar’s $137m).

This year, Saudi Arabian Lubricating Oil Company’s $1bn transaction tops the list followed by Oman’s Nawras ($474.7mn), Bahrain’s Aluminium Bahrain ($372.24) and Saudi’s Knowledge Economic City ($272mn).

Cancellation

There was one withdrawal – the deal, which what would have been the UAE’s first IPO in two years. Axiom Telecom Board withdrew its IPO offer and Nasdaq Dubai listing plans “to protect” current and future shareholders.

In 2009, one IPO deal – the $320m IPO of Al Tayyar Travel Group Ltd – was also withdrawn after a bookbuilding process failed to attract enough demand.

Axiom Telecom pulled its IPO offering two days before the listing, citing “widespread concerns about market conditions and liquidity” in spite of sufficient orders to fully cover the IPO book, primarily subscribed by institutional investors in Europe and the US.

It has planned to issue 289m shares at the price range per share of $0.80-1.15 The deal would have fetched $332m, but only relatively a small part of the fund raised was earmarked for boosting its business, with existing shareholders selling about two-thirds of the shares on offer.

Axiom itself would have received a maximum of $107 million and it said it would use $100 million of this to pay off some of $354 million in credit lines.

For more on this Click Here

Business 24|7